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Barry Ritholtz

A Good Story Doesn't Make a Great Investment Idea

We all love a well-told yarn, though it might be a money-loser.
We learn at an early age.

We learn at an early age.

Source: BSIP/UIG/Getty Images

The return of volatility in the first quarter versus 2017 was our focus last week. Some interesting pushback followed the premise that prices seem to ignore news sometimes and at other times hang on every headline.

My explanation: Most people have this correlation backward. Contrary to widespread belief, the news does not drive markets or prices; rather, it is the markets that drive news. As I wrote: